Union Pacific pauses the use of embargoes on its freight network, a practice that had increased significantly this year and prompted the Surface Transportation Board to convene Union Pacific CEO Lance Fritz and other top railroad executives earlier this week for a hearing in Washington, D.C. .
In a letter addressed to STB Chairman Martin Oberman and sent to the STB by Fritz on Friday, the Union Pacific CEO stated, “We are reviewing our use of congestion-related embargoes. To facilitate that hard look, we are immediately suspending of any additional embargoes under the pipeline inventory management program we initiated in November.
According to STB data, the use of embargoes by railways to control congestion has increased from a total of five in 2017 to more than 1,000 so far by 2022. Reports that the embargoes hamper shippers’ operations and increase supply chain problems for the national economy were one of the reasons that led STB to convene the hearing.
Union Pacific carries nearly 27% of rail freight and nearly 11% of all long-haul freight volume.
The railroad has argued that because of its geographic scope, number of yards, customer facilities and mix of goods, embargoes are one of the few tools it has to manage and measure customer-controlled stock levels of railcars and ease network congestion. It has also referred to embargoes as a “last resort”.
The STB has spoken out about its frustrations with Union Pacific, stating ahead of the December 13-14 hearings that Union Pacific “has not provided details” in response to an order from the STB for a “dramatic increase in embargoes since 2017 ” explain. ,” including whether UP has maintained sufficient funds during that period.
The STB is interested in how UP’s staffing and service levels have affected the supply chain and whether a lack of labor is part of the rationale behind the embargoes. Unions have said that even as major freight carriers add workers, the hiring data provided to STB masks a long-term trend in job turnover. An employment lawyer who testified at this week’s hearing said the Class I freight railroads may be hiring, but they don’t retain existing employees, so there’s no net profit.
“Instead, they are extending trains to sizes that exceed the capacity of the infrastructure, adding to congestion, rather than adding workers to improve service,” said Richard Edelman, one of the lawyers representing the railroad unions. represents.
A TBEN review of Union Pacific employment data provided to the STB beginning January 2019 through October details the history of labor turnover, a time frame that includes the combination of the deployment of the company’s precision rail strategy called Unified Plan 2020, which was launched in October 2018 and rolled out in phases across Union Pacific’s rail network. The impact of the Covid pandemic is also reflected in the drop in labor.
A total of 27,753 vessels were in service as of October 2022, compared to 32,315 in October 2019, according to a Union Pacific spokesperson.
Union membership data shows that employment on all Class I rails, including Union Pacific, has fallen from just before the start of the pandemic and even fell between October 2021 and October 2022.
